The National Board of Revenue has cut 2 per cent advance income tax on import of cotton and items of man-made fibre, effective immediately, amid repeated demands from the country鈥檚 textile millers.
According to a gazette notification issued on Thursday, the government removed the 2 per cent AIT from 15 HS codes, including carded and non-carded cotton, carded and non-carded synthetic staple fibres, carded and non-carded artificial staple fibres, polyesters, acrylic or modacrylic, manmade yarn wastes and others.聽聽聽聽
Earlier, a 2 per cent AIT was introduced on over 150 imported raw materials, including cotton and man-made fibres, in the national budget for the current financial year 2025-26, to collect additional revenue from these items in聽FY26.
After announcing the 2 per cent AIT on cotton imports, effective from July 1, the country鈥檚 textile millers expressed concerns over losing competitiveness.
They said that the $23-billion sector, which was already struggling with domestic issues like disruptions in gas supply, could be hit hard by the 2 per cent AIT.
On July 3, Showkat Aziz Russell, president of the Bangladesh Textile Mills Association, sent separate letters to advisers of the finance and commerce ministries, governor of the Bangladesh Bank and chairman of the NBR, urging the withdrawal of the 2 per cent AIT.
The textile millers also held a press conference on July 5, further urging the government to remove the AIT, as otherwise they would lose competitiveness.
Cotton is the primary raw material for the country鈥檚 highest export-earning sector, readymade garments, which account for more than 83 per cent of the total export earnings, according to the Export Promotion Bureau.
However, Bangladesh is primarily dependent on imported cotton, importing approximately 99 per cent of its total demand.
According to the United States Department of Agriculture, Bangladesh, the world鈥檚 largest cotton importer, imported about 8.2 million bales of cotton in marketing year 2024-25, mostly from West African countries, followed by Brazil, India and the US.
